Mid-Year Budget Review: Macro-fiscal targets for 2024 revised

Finance Minister, Dr. Mohammed Amin Adam has announced the revision of macro-fiscal targets for 2024.

He said it is has become necessary to revise the 2024 macroeconomic framework due to the latest economic developments, both domestic and global, including the impact of the debt restructuring.

During his presentation of the Mid-Year Budget Review on Tuesday, July 23, Dr. Amin Adam noted that “key revisions to the macro-fiscal targets for 2024 include: Overall Real GDP Growth rate revised upwards from 2.8 percent to 3.1 percent; Non-Oil Real GDP Growth rate of revised upwards from 2.1 percent to 2.8 percent; Growth in GDP deflator scaled down from 20.2 percent to 17.5 percent;

“Nominal overall GDP has been revised from GH¢1,050 billion to GH¢1,020 billion; Non-Oil GDP has been revised from GH¢979 billion to GH¢977,093 billion; End-period headline inflation remains unchanged at 15 percent; Primary Balance on Commitment basis is maintained at a surplus of 0.5 percent; and

Gross International Reserves (including oil funds and encumbered/pledged assets) to cover not less than 3.0 months of imports. “

He added that accounting for these developments, the revision of the 2024 fiscal framework indicates that the primary balance on a commitment basis remains unchanged at the targeted surplus of 0.5% of GDP, in line with the IMF-supported PC-PEG objectives.

Also, “Total Revenue and Grants have been revised upward by 0.5 percent to GH¢177,220 million (17.4% of GDP) in 2024, from the 2024 Budget target of GH¢176,414 million (16.8% of GDP), largely reflecting increase in Non-Oil Non-Tax Revenue which has been increased from GH¢14,837 million (1.4% of GDP) to GH¢15,638 million (1.5% of GDP) to reflect dividends from interest accrued in the ESLA accounts.

"Mr. Speaker, Total Expenditure (commitment) has been revised downward by 2.1 percent, to GH¢219,749 million (21.5% of GDP) from the original budget projection of GH¢226,681 million (21.6% of GDP). This revision is largely on the back of Interest Payments which has been revised downwards by GH¢7,934 million to reflect the impact of the external debt restructuring on external interest payment.

"Mr. Speaker, the overall balance on commitment basis has been revised from a deficit of GH¢50,267 million (4.8% of GDP) to a deficit of GH¢42,529 million (4.2% of GDP). The primary balance on commitment basis is maintained at surplus of 0.5% of GDP.

"Mr. Speaker, the cash deficit of GH¢54,142 million (5.3% of GDP) is expected to be financed from both foreign and domestic sources. The Net Foreign financing will amount to GH¢15,222 million (1.5% of GDP) representing 28.1 percent of the total financing for 2024. Foreign financing will include disbursements from the second and third tranche of the IMF ECF programme and World Bank Development Policy Operation (DPO) funding.

"Mr. Speaker, the Domestic Financing will amount to GH¢38,920 million (3.8% of revised GDP), representing 71.9 percent of the total financing for 2024. This is expected to be sourced from the issuances of debt at the short end of the domestic market and inflows from Ghana Petroleum Funds,” he stated.

He however, maintained that Ghana’s medium-term macroeconomic and financial outlook and prospects remain positive and favourable despite the challenging global environment.

He said the ongoing implementation of the IMF-supported Post-COVID-19 Programme for Economic Growth (PC-PEG) reinforces commitment to navigate through global uncertainties and address domestic challenges.

“Government’s unwavering dedication to maintaining macroeconomic stability, promoting investment, and enhancing social protection programs continues re-echo our objective of building back better,” he added.